Conner: Farm bill conference must address AGI limit, taxes

Acting Agriculture Secretary Chuck Conner says the farm bill passed by the Senate fails to strengthen the farm safety net, relies on budget “smoke and mirrors” and continues to send subsidies to people among the wealthiest 2 percent of Americans.

Other than that, Conner told reporters, he hasn't found much to like about the Food and Energy Security Act of 2007, the name given the new farm bill that cleared the Senate by a 79-14 vote on Dec. 14.

Although all of the nation's farm organizations have endorsed the Senate-passed bill, Conner called it “fundamentally flawed,” using almost the same words former Secretary Mike Johanns did when describing the farm bill the House approved by a similar margin last July.

“The House and Senate need to address the concerns that matter to farmers the most,” said Conner. “We have heard from farmers all across America in over 50 Farm Bill Forums since 2005, and most have made it clear there must be an end to income subsidy payments for the richest people in the country.

“Farmers understand that a program that takes tax dollars from middle income America and transfers those dollars to the nation's wealthiest few is bad policy, and damages the credibility and the purpose of farm programs.”

Conner, who served as staff director for the Senate Agriculture Committee when it passed Freedom to Farm in 1996, was referring to the Senate's refusal to adopt Minnesota Sen. Amy Klobuchar's amendment limiting to $750,000 the adjusted gross income a farmer could report from any sources and continue to receive farm subsidies.

The Senate bill, which was drafted by its Agriculture Committee in September and October, would reduce the AGI limit from the current law's $2.5 million to $1 million in 2009 — unless two-thirds of the AGI is from farming — and to $750,000 in 2010. The House bill sets the limit at $500,000 unless 75 percent of the income is from farming.

The Bush administration has been recommending a more draconian AGI limit of $200,000, citing Internal Revenue Service data that shows only 71,800 farmers or 3.6 percent of those reporting a profit or loss from farming had adjusted gross incomes of more than $200,000 in 2004.

Conner acknowledged that supporters of the Klobuchar amendment and the amendment offered by Sens. Byron Dorgan, D-N.D., and Charles Grassley, R-Iowa, placing a “hard cap” of $250,000 on farm program payments failed to receive the 60 votes needed for passage.

“A majority of the Senate voted twice for tougher payment situations out there,” he said.

“Unfortunately it didn't meet the super-majority threshold vote, but I will tell you that there's very, very broad support out there in the countryside at the grass-roots level.”

The AGI limit is one of the issues that must be addressed by a House-Senate conference committee before Conner would recommend the president sign a new farm bill. The second: the “tax increases” in the Senate bill.

“The start for getting this farm bill back on track obviously has to be a farm bill that is not about taxes, not about budget gimmicks — the physical side of the equation,” he said. “And again, it is painful for me to think that Congress has proceeded down that track of taxes and basically misrepresenting the true cost of this bill.

“I'll just start with the two because they're fundamental. Two simple things: get the fiscal side of this thing right and fair and honest, and secondly take the wealthiest 2 percent of Americans off the taxpayer dole here. And you're on a great path toward getting a farm bill done very, very quickly.

For their part, House Democrats have said the House bill closes tax loopholes that have permitted foreign corporations to transfer their U.S. earnings offshore and avoid paying U.S. taxes on them. In the Senate, Democrats have said their bill is fully paid for and actually costs $2 billion less than the president's farm bill proposals.

Conner told reporters he is “fully aware” that farmers face uncertainties and deserve a safety net for the risks they take to continue to produce food and fiber for the United States and a good portion of the world.

“Yet I believe this farm bill fails to strengthen the safety net, and it increases taxes to generate $15 billion in revenue used to grow the size and scope of our federal government. This is the first time a farm bill has relied on tax increases since 1933.

The secretary also defended the administration's decision not to recommend adjusted gross income limits for payments for conservation programs in the new farm bill. “I will just tell you that this was a close call for us in terms of whether or not we applied the $200,000 limit to them,” he said.

“At the end of the day, we made that decision because we thought if there's great conservation benefits provided through these programs that the general public benefits from, and if we can secure those benefits from virtually any American, any size farmer, any person regardless of wealth, that that's probably good for the general public. And so we left that alone.”